Top Tips on the Best Ways to Invest Your Money When You’re Young

June 24, 2019

For the vast majority of millennials, hearing the term “invest your money” can be confusing. Unless you work in the financial sector or have some sort of experience with investing money, it can seem like an impossibility in which you don’t know where to start. It’s something we’re not taught at school for some reason; however, it is something that’s an incredibly important life skill and can help you to increase your financial worth in the future. Whether you’ve recently come into a large amount of money, or you’ve managed to save up a lump sum, it doesn’t have to be rocket science, and with these top tips you’ll soon know which is the best way for you to invest your funds.

invest your money

Share Dealing

Investing your money into share dealing and trading in shares can be a good way to make a return on your money, however you’ll first of all want to ensure that the costs aren’t astronomical and you aren’t paying more than what you’ll ultimately gain. This is basically the act of buying shares in a company, with the aim of selling them on in the future to make money. It’s completely up to yourself how much control you’ll have in the process too. You can go for one of three options:

  1. Getting financial advice on which shares to trade and sell.
  2. Having no guidance from a broker, and ultimately going it alone (not advisable if you’re just starting out and have no experience).
  3. Let a broker make all of the trades for you.

Whatever way you decide to do it, make sure you research what the best option will be for you, and if necessary, seek the advice you need.

Investing in Property

It goes without saying that having a lump sum of money to invest would be the ideal time to put a deposit down on a property, or putting it in an account to help you eventually put down a deposit (depending on the total you have.)

If you’re a first time buyer and you don’t have quite enough for an immediate deposit, you might want to invest your money in a help to buy ISA. The good thing about these accounts is that they’re tailored specifically for young people looking to invest in their first property. Whatever it is you put into the account the government will match by 25%. Basically, for every £200 you put into the account, the government will add a further £50, which isn’t half bad when you’re trying to save up a decent sized deposit. A lot of young people are hesitant to invest in property because of it being a long-term commitment, and because they think that it limits you to only living in one place, but this isn’t actually the case. There are so many options out there in the future if you’re looking to move on and sell your home, for example cash house buyers Ready Steady Sell will value your home for free and will buy it quickly for cash. Investing in property isn’t a life sentence, just an investment of your security and your future.

Hire an Expert to Invest for You

If you really feel unsure in the ways to invest your money and aren’t all too bothered about being involved in the practicalities, you could look into hiring someone to do all of your investing for you, for example, in a grouped investment. There are different types of grouped investments that you could choose:

  • OEIC’s or Open-Ended Investment Companies. This means that there’s no limit to the number of shares you invest in a company.
  • Unit trusts, which is an open-ended investment that lets you buy units in the trust.
  • Or Investment trusts. This is investing in a listed company who then use your money to buy assets in other companies.

Savings Account

Last, but certainly not least, the humble savings account. If you’ve got a large sum of money and you currently have no idea where to invest it or what’s going to be best for you, never underestimate the use of a decent savings account. You’ll want to choose your savings account based on four factors:

  1. How much you’re wanting to save.
  2. What sort of access you need, and how much of it.
  3. How long you can tie the cash up for.
  4. Whether or not you want to save without paying tax.

Despite not earning you much interest, putting your money in a savings account is the safest place for it until you decide what it is that you’re wanting to invest in. It’s better to open a savings account initially than it is to go straight in and invest your money incorrectly, so do your research. Happy investing!

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